Phoenix Technologies (PTEC) Message Board

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Technology Stocks : Phoenix Technologies (PTEC)

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To: Fred Fahmy who wrote (449)	2/4/1997 2:10:00 AM
From: Mark Brophy	of 3624

Re: US Robotics vs. Phoenix These are interesting to compare: Forward looking P/E between 19 and 20 for a company which has had sustained EPS growth of more than 40% for last five years. Last year's growth rate was well over 100% but we'll call that an anomoly. At any rate, nothing to suggest that 40% growth rate cannot be maintained or improved going forward. Let's assume both companies grow at a 40% rate for at least the next 2 years. According to the SI profile, the USRX trailing P/E is 32, so a 40% growth rate would imply a forward P/E = 23. If Phoenix earns $0.80 in 1997, the forward P/E = 20. The book value of USRX = 8.00, of which hardly any is cold hard cash. Phoenix has a huge edge there. I like cold hard cash, because it's harder to make it disappear and the balance sheet is unlikely to be restated. That's why I mentioned Meridian Data. US Robotics has a lower spread, so it's much more liquid. My superficial comparison indicates Phoenix is still a better deal, but US Robotics might be worth considering for folks who like to diversify.

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